00:00Isabel Hilson is chair of the Great Britain China Centre. Isabel, welcome back. Good to see you.
00:06Well, despite the positivity and the excitement and the diplomatic niceties, the elephant in the room as China and the
00:12UK meet,
00:14is the steel industry and the problems surrounding that, is that likely to be resolved?
00:21I think that will take some time, to be honest. I mean, it's very good to see the enthusiasm and
00:27it's very good to see the warming relations.
00:29And the promises. But I think, like the steel industry, there are a number of issues that are quite tricky.
00:36And that the closer one gets to trying to execute this goodwill, if you like, in deals, those issues will
00:44come up.
00:45It's not going to be resolved today.
00:47Wang Wentao, in his speech, described the UK services industry as a key strength.
00:53Is services trade going to become the new centrepiece of this China-UK relationship?
01:01Well, I think it has been the centrepiece for some time in the sense that it is the very positive
01:07side of what is quite an unbalanced balance sheet.
01:12And services do remain key strengths of the UK economy.
01:15And that includes, by the way, education, which we often forget when we talk about services.
01:20And that's been a very large part of positive bilateral engagement, despite the ups and downs in politics.
01:27But the total trade, you can see the importance of services if you look at where it fits in the
01:32picture.
01:33Total trade between the UK and China was upwards of $134 billion in 2025.
01:39That's up 5%.
01:40But there's a significant structural imbalance.
01:45So the UK has an $11.7 billion surplus in services, and that's important.
01:50The gap, however, in goods, the deficit, is $51.4 billion.
01:56And the difficulty is that I really don't see that services will ever close that gap.
02:01So whilst it is very positive, we also have to address the other side of the balance sheet, to have
02:07a balanced relationship.
02:09The UK Minister Peter Kyle said serious engagement is back.
02:13And beyond the words, what concrete outcomes should businesses expect from this?
02:19Well, I think what they're hoping for is that market access improves.
02:25The consumer market in China has been underperforming.
02:28And foreign brands have faced a range of non-tariff barriers, so many of them, many important exporters, are losing
02:37market share.
02:39There is the question of subsidies to Chinese companies.
02:44And the recent OECD report was quite influential.
02:48The numbers were pretty shocking.
02:50You know, they put it at between four and nine times the subsidies that businesses in OECD countries receive.
02:57And that just creates unfair competition and unlevel playing field.
03:02So I think UK businesses would really like to see acknowledgement from China that this is a real problem and
03:09some action.
03:10Because, frankly, you know, if trade is not mutually beneficial, then trade is not going to flourish.
03:16So I think a conversation about that which leads to some outcomes, I think, would be a tremendously positive move
03:24at this point.
03:25Isabel, good to see you.
03:26Isabel Hilson, the Chair of the Great Britain China Centre.
